Philippine Central Bank Chief Favors BSP Official as Successor

  • Deputy governors say they will take post if offered to them
  • Central bank experience key to ‘seamless transition’: Tetangco

Amando Tetangco.

Photographer: Veejay Villafranca/Bloomberg

Philippine central bank Governor Amando Tetangco said his successor must have a background of having worked at Bangko Sentral ng Pilipinas, signaling he may decline an offer to remain in his post in favor of one of his deputies.

“For a seamless transition, the next BSP governor should be one with central banking experience,” Tetangco said in a mobile-phone message on Wednesday, in response to a question on whether he will back his deputies, Nestor Espenilla and Diwa Guinigundo, for the post that he vacates in July. Both deputy governors said they will accept the job if offered.

Tetangco, 64, declined to say whether he turned down an offer from President Rodrigo Duterte to stay in office after his second, six-year term ends. In order to remain, the government will need to amend a law that limits the governor’s tenure to two terms.

“The next BSP governor will have the support of a competent, dedicated and committed team focused on achieving the institution’s mandate,” Tetangco said.

Tetangco started his career at the central bank in 1974 as a statistician and first became governor under President Gloria Arroyo in 2005. He was reappointed by Benigno Aquino in 2011. He has kept inflation under 3 percent for almost two years and is set to keep the benchmark interest rate at a record-low of 3 percent on Thursday, according to all 18 economists surveyed by Bloomberg.

Tetangco’s looming departure comes at time when emerging nations are bracing for capital outflows as the U.S. embarks on a steeper tightening path. The peso is trading near levels unseen in a decade.

“It’s important that the new governor has experience in central banking and a background in macroeconomics, more so today than ever, given how complex the financial systems have become,” said Nicholas Mapa, an economist at Bank of the Philippine Islands. “Tetangco managed to weather the financial storms that came his way since he started at the helm of the central bank. It’s big shoes to fill.”

Espenilla, 58, and Guinigundo, 62, both studied economics at the University of the Philippines, worked for more than three decades at the central bank and had stints at the International Monetary Fund.

Espenilla, head of banking supervision, said Bangko Sentral is doing very well in keeping macroeconomic stability and must continue reforms in the financial sector.

“The monetary policy direction is already set; it’s a question of maintaining the direction and improving the way we conduct it, in a way that’s efficient and compatible with a rapidly-developing and modernizing financial system,” Espenilla said on Dec. 19.

Monetary Tools

Guinigundo, who oversees monetary stability, views the approaching year with caution, stressing the need to strengthen monetary tools, sharpen policy research and amend the Bangko Sentral charter.

“Our regular surveillance indicates rough sailing in 2017,” Guinigundo said in a mobile-phone message. “It is imperative that we should prepare to ride out any storm next year. We should aim for the central bank that will help bring the Philippine economy to safe and definitely more promising harbor.”

Local media have also cited Foreign Affairs Secretary Perfecto Yasay and East West Banking Corp. President Antonio Moncupa as possible candidates for governor. The terms of these central bank Monetary Board members will also end in July: Alfredo Antonio, Felipe Medalla and Armando Suratos.

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